Russia's defense budget surges as military spending soars
The law concerning Russia's federal budget, signed by Vladimir Putin, outlines a 25 percent increase in military spending compared to the current year. This information was reported by Reuters, citing a legal document published on Sunday in the official online journal.
The published budgetary projections for the years 2025-2027 indicate that the largest expenditures for "National Defense" are planned for 2025, with a gradual decrease anticipated in the following years.
Russian military spending increases
Military expenditures related to the "special military operation"—as the Kremlin refers to the conflict it initiated in Ukraine—and other security services account for one-third of the state budget expenditures. However, these expenses are kept private and are not subject to public oversight.
Reuters notes that by approving the budget in this manner, the Russian government acknowledges that military spending for the ongoing conflict is a top priority. This spending surpasses the planned allocations for education, healthcare, and social policy combined.
The independent Russian portal Meduza reported that defense spending in 2025 is approximately 13.5 trillion rubles, or about 125 billion USD, comprising about 6.3 percent of Russia's GDP.
For 2026, military expenditures are expected to be 12.8 trillion rubles (approximately 127 billion USD), and for 2027, 13.1 trillion rubles (approximately 131 billion USD). Overall, Russia plans to allocate at least 40 percent of its budget to defense and national security from 2025 to 2027.
War economy
Since 2022, Moscow has systematically reoriented its economy towards wartime activities, which involves an intensive development of the military industry and a significant increase in employment within this sector. Russia's military budget for the current year has already reached a record high, exceeding the previous year's budget by 70 percent. Together with investments in the security sector, it accounts for 8.7 percent of GDP.
As reported on money.pl, the Russian central bank raised interest rates to 21 percent this October, the highest level in two decades, and market analysts predict they may rise to 23 percent by the year's end. This is an unusual strategy during wartime when central banks typically aim to maintain economic activity. "The Economist" suggests that the Kremlin's actual war-related expenditures are significantly higher than what is officially reported by the Putin regime.
